Fresh reports are indicating that China intends to conduct real-world tests of its central bank digital currency this year. Specifically, the first tests of this CBDC will reportedly take place in the high-tech Chinese city of Shenzhen.
China will reportedly deploy CBDC testing before the end of 2019
This news first came in a local report from the Caijing news outlet on December 9th. According to the news report, China’s central bank now looks to accelerate its efforts to deploy a digital yuan. There has been much speculation over a potential Chinese central bank digital currency (CBDC) over the past months.
Now, it looks as if this CBDC might soon go live – at least in a test phase. This report suggests that the Chinese CBDC could undergo a test pilot in the city of Shenzhen, and possibly Suzhou. Additionally, this CBDC test pilot will also supposedly involve some major actors.
The report alleges that the People’s Bank of China will partake in the pilot, as well as four other major banks and other notable actors on the Chinese technology scene, such as China Telecom. These will then team up to test the digital currency payment system.
Different banks will “compete” to see who runs the CBDC the best
Moreover, the article goes into considerable detail over how this process will likely go down. “One step will be to rationally select the pilot verification area, scenario and service scope, and steadily promote the introduction and application of digital form of fiat currency,” Caijing said before going on:
“Compared with the previous pilot, this time the central bank’s legal digital currency pilot will go out of the central bank system and enter real service scenarios such as transportation, education, and medical treatment, reaching C-end users and generating frequent applications.”
Interestingly, the People’s Bank of China are supposedly looking to encourage a “horse race” between the different banks. Specifically, this will see each of the banks manage the CBDC differently.
As such, they will effectively compete against each other in order to decide the best model for boosting future adoption. Furthermore, the report also says that “other locales” could also be included in the testing at a future point – although details are currently scarce.
Nevertheless, this test pilot will be a significant event in the digital currency world. If the Chinese central bank begins testing this CBDC, it would mark the first time a central bank actually issues a digital currency.
Rasmus Pihl is a writer for Toshi Times by day and an avid follower of the blockchain industry by night. Rasmus holds a Bachelor’s Degree in Marketing from the Gothenburg School of Business, Economics, and Law and runs a Swedish marketing consulting firm. Moreover, when he isn’t writing for Toshi Times, traveling, working or changing the world in some other capacity, Rasmus is more than likely caught up in postgraduate studies.